Tory posters claiming Labour is planning a £20,000 "death tax" to fund a national carers service have been condemned as "grotesque" and a lie by Dame Joan Bakewell, the former BBC presenter and the government's "voice of older people".

She accused the Conservatives of "an insult to older people", and said the collapse of talks designed to reach a cross-party consensus on funding future social care will increase despair about politics.

The Guardian revealed this week that Andy Burnham, the health secretary, has been looking at introducing a compulsory inheritance tax, set at a maximum of £20,000, as the preferred option in a white paper due next month.

Burnham believes that after years of delay the government might win public respect for being brave on the issue.

Bakewell was one of a number of ­advocates of a better-funded social care system in Britain who expressed exasperation at the inability of the parties to put the tricky issue beyond party politics. She has also criticised Labour's handling of the issue. She said: "What the country needs is solutions, and not wars between parties. We have had a lot of pious talk recently about how we must salvage the reputation of parliament because of the expenses scandal, but scandal is still going on because people are telling lies.

"That poster 'Gordon Brown wants £20,000 when you die' is merely one of a series of options being put forward as a way of stopping people having to sell their houses. This option of paying £20,000 out of your estate when you die is one proposal put forward in good faith. To turn it into this grotesque poster is an insult to ­everybody and it damages the case for older people and their care."

Andrew Lansley, the shadow health secretary, defended the posters and his decision to pull out of the talks last month. He said he had not consulted David ­Cameron about the talks.

The poster has led to a furious private row between Burnham and Lansley.

Cameron's staff ordered the posters to go up after the Guardian reported that Burnham was pressing for the levy to be included in Labour's manifesto. "It was necessary to criticise him and right to criticise him, because frankly it is an extremely bad policy," Lansley said.

Lord Mandelson, the business secretary, accused Cameron of "driving a wrecking ball" through attempts to reach cross-party consensus. "It is cynical, short-sighted and contemptible behaviour."

Lansley said a compulsory levy would penalise families who look after their elderly relatives at home; they would have to pay the money even though their relatives did not go into residential care.

Lansley also revealed that he initiated the private talks with Burnham last year, which also included the Liberal Democrat health spokesman, ­Norman Lamb. But he strongly denied that ­Cameron had ordered him to pull out, on learning of the discussions. He said that the discussions ended in January because the sides could not agree on the principles of reform.

He said: "No agreement had been reached, and, in particular, no agreement about any further process was undertaken, nor any agreement that political parties shouldn't be able to continue to campaign on our policies and to criticise each others' policies."

Burnham has been pressing him to drop claims that Labour would fund residential care by cutting invalidity benefit.

Lamb said the parties in the talks had agreed key principles on the importance of preventative healthcare, on being able to move the care package around the country, on involving and recognising the role of carers, and on efforts to give individuals as much freedom as possible to decide how money devoted to their care should be spent.

Labour was looking last night to see if it could win Liberal Democratic agreement to propose to Lansley that the all-party talks resume on the basis that a flat rate levy was not on the table.

Cabinet ministers privately admit the levy, set out in a green paper in the summer, is high risk but need to find the extra £6bn or so required annually to look after an ageing population's care needs. Last October Lansley proposed a social insurance system costing £8,000 per person that would cover residential care costs for life.

At present many older people sell their homes to fund residential care. The average cost of residential care for a 65-year-old over the rest of their life is £30,000.